Published in Sep-Oct 2017
Since the announcement of the National Aviation Policy (NAP) 2015 – whereby the government liberalised the air market to encourage foreign airline participation, particularly from the Middle East, the future of Pakistan’s air and travel industry appears promising. Based on current economic and demographic growth, the International Air Transport Association (IATA) has projected that intra-Pakistan air traffic will grow at 9.9% over the next 20 years; more than twice the 4.1% projected annual world growth rate (source: JCR-VIS Pakistan Aviation Industry Report 2016).
The latest entrant to venture into Pakistani skies is SalamAir, a budget airline from Oman, launched in January 2017 with the objective to bridge the demand gap for quality and affordable flights by business, leisure and religious travellers on short-haul routes to and from Oman. SalamAir currently flies daily from Muscat to Dubai and Jeddah and thrice a week to Karachi, Madina and Sialkot.
Based on current economic and demographic growth, the International Air Transport Association (IATA) has projected that intra-Pakistan air traffic will grow at 9.9% over the next 20 years; more than twice the 4.1% projected annual world growth rate (source: JCR-VIS Pakistan Aviation Industry Report 2016).
In Pakistan, the airline began operations from Sialkot and according to Mohsin Al-Balushi, Commercial Director, SalamAir, “this is a very exciting time for aviation in Pakistan; especially after the NAP 2015 announcement that laid the groundwork for the industry to capitalise on the China-Pakistan Economic Corridor (CPEC) and attract new investment into the sector.”
Terming CPEC as a “corridor of tremendous opportunities”, Al-Balushi says it will be a catalyst for future business and economic activity and will generate thousands of jobs across Pakistan. It will also open up an era of unprecedented growth for both domestic and international air cargo and passenger traffic. Moreover, the flights will also serve the needs of the Sultanate’s Pakistani community, which is currently over 220,000.
Elaborating on aviation prospects in Pakistan, Al-Balushi quotes the World Bank’s forecast whereby Pakistan will experience a growth rate of 5.5% by 2018. Pakistan has also been classified as the world’s fifth fastest growing economy. Given these projections, he believes more affordable airlines will be keen to follow SalamAir’s lead and will begin services in Pakistan as well.
Terming CPEC as a “corridor of tremendous opportunities”, Al-Balushi says it will also open up an era of unprecedented growth for both domestic and international air cargo and passenger traffic. Moreover, the flights will also serve the needs of the Sultanate’s Pakistani community, which is currently over 220,000.
Furthermore, the launch of SalamAir will enable Pakistan’s business community to capitalise on Oman’s investor-friendly regulatory framework and the many options its economy offers including tourism, manufacturing, fisheries, mining and logistics. Similarly, it will also open up travel for Omanis keen to explore the opportunities arising from CPEC projects.
In terms of why SalamAir began operations from Sialkot, Al-Balushi says it is a major export city of Punjab and which has remained an under-served destination. “We saw a promising development there and this has proven very successful.” By starting flights from Sialkot, SalamAir is not only targeting the business community of one city, but of the entire ‘export triangle’ (Gujrat, Gujranwala and Sialkot), which manufactures and exports ceramics, cutlery, gloves, leather garments, sports goods, sportswear and surgical tools. Apart from SalamAir, five other international airlines operate direct passenger and cargo flights from Sialkot Airport including Air Arabia, Emirates, Etihad Airways, Fly Dubai and Qatar Airways.
SalamAir’s flights in Karachi began in June and the third target city is Multan which according to Al-Balushi, is under discussions. “Although we were given the slot approval for Multan months ago, we are still waiting for landing permission.” The airline is also working on expansion to new destinations and these will be announced shortly.
SalamAir has a fleet of three A320s; passengers have three ticket options; Light, Friendly and Flexi. With a hand baggage allowance of seven kilograms, ‘Light’ is the lowest fare option and does not permit any change or cancellation once the booking is made. ‘Friendly’ has a baggage allowance of 20 kg as well as the facility of making changes by paying a fee. The ‘Flexi’ option allows the same baggage allowance, a priority check-in and the ability to change flights without paying a fee.
Keeping in mind the competition from multiple international airlines, SalamAir aims to grab market share through a competitive price structure. A one-way trip from Karachi to Muscat via SalamAir is priced between Rs 8,000 and 9,400. In comparison, the same flight on Etihad Airways costs Rs 24,000, on Fly Dubai and Air Arabia Rs 19,000, on Emirates Rs 23,000 and on Oman Air Rs 25,000 respectively. In terms of local airlines, only PIA (market share 51% as of FY15) and Airblue (market share 13%) fly to Muscat. The former charges between Rs 23,000 and 26,000 (from any city to Muscat) while Airblue offers only Lahore to Muscat flights for Rs 22,000.
Based on the above, Al-Balushi is confident that SalamAir will be successful in redefining the experience of budget airline travel by offering reliability, safety and affordability. “We have opened up the skies to passengers who were previously inhibited from flying because of the cost, while enabling others to fly more frequently.”
As more international flights touch local runways, Pakistan’s airports are expected to earn huge revenues and passengers will benefit from more choice, better services and competitive prices and discounts. Al-Balushi ends with a word of caution: “However, I hope the airport infrastructure improvements to sustain this growth will remain a priority for the government of Pakistan.”